Thursday, June 27, 2024

Nokia to acquire Infinera for $2.3 billion

Nokia has agreed to acquire Infinera for $6.65 per share, representing an enterprise value of US$ 2.3 billion and a premium of 28% to Infinera’s share price at the close of 26 June 2024.

The combined entity will benefit from substantial in-house capabilities, including an expanded digital signal processor (DSP) development team and expertise in silicon photonics and indium phosphide-based semiconductor material sciences. Additionally, the merger will deepen Nokia’s competency in photonic integrated circuit (PIC) technology.

The merger will also strengthen Nokia’s presence in the North American optical market, an area where the two companies have minimal customer overlap. Infinera, which has established a solid foothold in North America with approximately 60% of its sales, will enhance Nokia’s optical scale in the region. This complements Nokia’s strong market positions in APAC, EMEA, and Latin America. The combination builds on Nokia’s commitment to US-based manufacturing and advanced testing and packaging capabilities.

The companies cited increased scale and profitability as driving factors for the merger.

Key benefits listed by Nokia

  • Enhanced Global Scale: Increases Nokia’s Optical Networks business by 75%.
  • Advanced Capabilities: Expanded DSP development, silicon photonics expertise, and PIC technology.
  • North American Market Growth: Strengthens position with Infinera’s established presence.
  • Enterprise and Webscale Expansion: Accelerates growth in the enterprise sector and webscale market, leveraging Infinera’s 30% sales in this segment and recent advancements in high-speed, low-power optical components.

Nokia said the deal will strengthen its leadership in optical and increase exposure to webscale customers, the fastest growing segment of the market. The combination with Infinera is projected to accelerate Nokia’s journey to a double-digit operating margin in its Optical Networks business. Nokia targets to achieve EUR 200 million of net comparable operating profit synergies by 2027. This transaction along with the recently announced sale of Submarine Networks will create a reshaped Network Infrastructure built on three strong pillars of Fixed Networks, IP Networks and Optical Networks. Nokia targets mid-single digit organic growth for the overall Network Infrastructure business and to improve its operating margin to mid-to-high teens level.

Under the deal, for each Infinera share, Infinera shareholders will be able to elect to receive either: 1) $6.65 cash, 2) 1.7896 Nokia shares, or 3) a combination of $4.66 in cash and 0.5355 Nokia shares for each Infinera share. All Nokia shares will be issued in the form of American Depositary Shares. The definitive agreement includes a proration mechanism so that the Nokia shares issued in the transaction do not exceed an amount equal to approximately 30% of the aggregate consideration that may be paid to Infinera shareholders.

Pekka Lundmark, President and CEO of Nokia, said: “In 2021 we increased our organic investment in Optical Networks with a view to improving our competitiveness. That decision has paid off and has delivered improved customer recognition, strong sales growth and increased profitability. We believe now is the right time to take a compelling inorganic step to further expand Nokia’s scale in optical networks. The combined businesses have a strong strategic fit given their highly complementary customer, geographic and technology profiles. With the opportunity to deliver over 10% comparable EPS accretion, we believe this will create significant value for shareholders.”

Federico Guillén, President of Network Infrastructure at Nokia, said: “Today, Network Infrastructure offers a unique portfolio across the fixed access, optical and IP networks domains built on leading technology innovation and a strong customer focus. This acquisition will further strengthen the optical pillar of our business, expand our growth opportunities across all our target customer segments and improve our operating margin. I am extremely pleased that we are bringing together these two talented and dedicated teams. Separately, we have long respected each other as competitors. Together, we find the logic of combination irresistible.”

David Heard, CEO of Infinera, said: “We are really excited about the value this combination will bring to our global customers. We believe Nokia is an excellent partner and together we will have greater scale and deeper resources to set the pace of innovation and address rapidly changing customer needs at a time when optics are more important than ever – across telecom networks, inter-data center applications, and now inside the data center. This combination will further leverage our vertically integrated optical semiconductor technologies. Furthermore, our stakeholders will have the opportunity to participate in the upside of a global leader in optical networking solutions.”

Nokia to sell Submarine Networks business to French State

In a strategic move to streamline its portfolio, Nokia has announced plans to sell Alcatel Submarine Networks (ASN) to the French government. The telecommunications giant will initially retain a 20% stake in the company, with the intention of a full exit in the future. This decision aligns with Nokia's focus on core markets and its goal to improve profitability in its Network Infrastructure business group.

The proposed sale, which is subject to employee consultation and regulatory approvals, is expected to close by late 2024 or early 2025. The French State, represented by the Agence des participations de l'Etat (APE), has been deemed the most suitable custodian for ASN, given its long-term interest in critical infrastructure operations and maintenance. This move is anticipated to ensure continuity for ASN's customers, employees, and partners.

Following the divestment, Nokia's Network Infrastructure Business Group will be restructured to comprise three units: Fixed Networks, IP Networks, and Optical Networks. While this reorganization is projected to reduce the group's net sales by approximately €1 billion, it is expected to boost its operating profit margin by 100-150 basis points. Nokia has stated that this transaction will not affect its previously announced financial outlook for 2024.

Key points:

  • Nokia to sell ASN to the French government, retaining a 20% stake initially
  • Sale aligns with Nokia's strategy to focus on core markets and improve profitability
  • Transaction expected to close by late 2024 or early 2025, subject to approvals
  • Nokia's Network Infrastructure group to be restructured into three units
  • Deal expected to reduce net sales but increase operating profit margin

Pekka Lundmark, President and CEO of Nokia, said: “This is a good step forward in our strategy of actively managing our portfolio. ASN has been a standalone part of our Network Infrastructure business and through the divestment, Network Infrastructure will benefit from a streamlined portfolio with a focus on growth and strengthening its technology leadership. ASN has gone through a significant transformation in recent years and has a strong market position. I am pleased we have found a natural owner for the business. The French State will ensure continued investment in ASN and protection of critical industry know-how.” 

 Alain Biston, President and CEO of ASN, said: “This is an incredibly exciting moment for ASN as we undertake the next phase of our development. The French State’s ownership gives us a stable platform to further develop our vertically integrated technology offering. This, combined with Nokia’s retained stake, underscores all parties’ aligned interests in delivering a smooth transition for the benefit of our customers, suppliers and other stakeholders.” 

 Bruno Le Maire, French Minister of Economy, said: “The French State, represented by the Agence des Participations de l’Etat (French shareholding Agency), is thrilled to announce its willingness to acquire 80% shareholding of ASN. The Company is one of the world leaders in the submarine cable market, and the only company of its kind in Europe.”


  • Alcatel Submarine Networks (ASN) has a rich history dating back to the first submarine cables for telegraphs in the 1860s and 1870s. 
  • Over the decades, through various mergers and acquisitions, ASN has evolved into a global leader in undersea communication networks.
  • In recent years, ASN has been at the forefront of major submarine cable projects worldwide. One of its most notable achievements is the SEA-ME-WE 5 (South East Asia-Middle East-Western Europe 5) cable system, completed in 2016. This 20,000-kilometer cable connects Southeast Asia to Europe, enhancing connectivity across 17 countries. Another significant project is the Dunant cable, a joint venture with Google, stretching 6,600 kilometers across the Atlantic Ocean between Virginia Beach in the United States and Saint-Hilaire-de-Riez in France.
  • ASN has also been instrumental in developing innovative technologies for the submarine cable industry. The company has pioneered advancements in fiber optic technology, amplification systems, and cable protection methods. Its contributions have been crucial in meeting the ever-increasing demand for global data transmission capacity, supporting the growth of internet usage, cloud computing, and international telecommunications.
  • 1923: Submarine Telegraph Company (STC) is founded in Paris, France, to lay underwater cables for telecommunications.

  • 1954: STC merges with Compagnie Française de Télécommunications (CFT) to form Compagnie Générale de Télécommunications (CGT).
  • 1969: CGT creates a dedicated submarine cable manufacturing division, which becomes known as Submarine Systems (SS).
  • 1985: Alcatel is formed through the merger of CGT and ITT Corporation's European telecom activities.
  • 1987: Alcatel acquires Submarine Systems (SS) and renames it Alcatel Submarine Networks (ASN).
  • 1990s: ASN becomes a leading player in the submarine cable industry, providing turnkey solutions for fiber-optic cable systems.
  • 1998: Alcatel acquires Vitrove, a French fiber-optic component manufacturer, and incorporates its technology into ASN's products.
  • Early 2000s: ASN faces increased competition from other telecom equipment manufacturers, including Huawei.
  • 2006: Alcatel merges with Lucent Technologies to form Alcatel-Lucent.
  • 2013: Nokia acquires Alcatel-Lucent, including ASN, and merges it with its own submarine cable business.

Marvell debuts 1.6T PAM4 DSP for active electrical cables

Marvell introduced a high-performance, 1.6T PAM4 DSP for active electrical cables (AECs) designed for the greater connectivity bandwidth requirements between AI accelerators, server to top-of-rack links and switch-to-switch interconnects within data center racks..s

The new Marvell Alaska A 1.6T DSP, which leverages 5nm process technology and over a decade of Marvell PAM4 leadershio, features eight 200 Gbps SerDes lanes to the host device and eight 200 Gbps SerDes lanes to the copper cable. The industry-leading equalization engine built into the Alaska A 1.6T DSP enables cable reaches of greater than three meters, addressing the reach requirements for inside-the-rack copper connections. The Alaska A 1.6T DSP is designed for next-generation accelerated infrastructure with 200 Gbps I/O interfaces on AI accelerators, GPUs, NICs and switches.

Key features of the Alaska A 1.6T AEC DSP include:

  • Proven DSP-based 200G PAM4 SerDes
  • Advanced digital equalizer with Feed Forward (FFE), Decision Feedback (DFE) and Maximum Likelihood Sequence Detection (MLSD)
  • Greater than 3-meter reach at 200G/lane
  • 200 Gbps per lane electrical line-side interface
  • Optimized for QSFP-DD and OSFP form factors
  • Retiming and gearboxing support
  • Cable reference design for 1.6T AECs
  • SDK support for advanced telemetry and diagnostics

The new device has gained support from leading copper cable manufacturers, including Amphenol, Molex, and TE Connectivity.

Marvell says the traditional method of using direct attached cable (DAC) for short-reach copper connections between AI accelerators and other components in server racks is facing limitations as data speeds increase to 200G/lane. The use of passive DACs is becoming less viable due to the declining distance over which they can effectively operate. To address this, Active Electrical Cables (AECs) are emerging as a critical solution. AECs leverage PAM4 DSPs to retime signals, thereby extending the reach of copper interconnects and allowing for the use of thinner cables in high-density data center environments.

“The next wave of AI clusters will need 200 Gbps signaling to handle the bandwidth requirements of generative AI and large language models,” said Venu Balasubramonian, vice president of product marketing, Connectivity Business Unit, at Marvell. “The newest addition to our Alaska A product line extends our leadership in delivering PAM4 DSP technology for short-reach copper connectivity for cloud AI clusters.” targets highest performance ASIC for AI transformers, a start-up based in Cupertino, California, has introduced its Sohu ASIC, a specialized chip designed specifically for transformer architecture-based artificial intelligence models. According to the company, Sohu is capable of processing over 500,000 tokens per second in Llama 70B throughput, surpassing the performance of leading AI chips from Nvidia and other major players.

Key Points:

  • Sohu ASIC claims to be the fastest AI chip of all time
  • Processes over 500,000 tokens per second in Llama 70B throughput
  • Designed specifically for transformer architecture-based AI models, such as ChatGPT, SD3, and Sora
  • Partners with TSMC on 4nm process and secured HBM and server supply from top vendors
  • Raised $120M in funding from multiple investors, including Primary Venture Partners and Positive Sum

Google Cloud and Gulf Edge to offer sovereign cloud in Thailand

Google Cloud has entered a multi-year agreement with Gulf Edge Company to provide sovereign cloud services in Thailand. This partnership aims to support organizations in critical industries with their digital transformation efforts by leveraging advanced AI and analytics capabilities. The services will adhere to Thailand’s stringent data residency, security, and privacy requirements, ensuring data, operational, and software sovereignty for customers.

Key details of the collaboration include Gulf Edge’s authorization to operate Google Distributed Cloud (GDC) as a Managed GDC Provider (MGP), focusing on air-gapped configurations for Thai organisations. Deployment options will include GDC air-gapped on-premises or within Gulf Group data centers, offering flexible hardware choices to meet specific workload needs while ensuring compliance with local legal frameworks, such as the Personal Data Protection Act. Through GDC, organizations will access core features of Google Cloud’s Vertex AI, enabling the development and deployment of advanced ML and AI applications within Thailand. Additionally, customers can utilize Google Cloud’s hardware and software resources, including Google Kubernetes Engine (GKE), NVIDIA Tensor Core GPUs, AlloyDB Omni database engine, and Dataproc, in a secure, air-gapped environment.

Key Points:

  • Strategic Partnership: Google Cloud and Gulf Edge team up to deliver sovereign cloud services in Thailand.
  • Managed GDC Provider: Gulf Edge authorised to operate Google Distributed Cloud with a focus on air-gapped configurations.
  • Local Compliance: Solutions adhere to Thailand’s data residency, security, and privacy requirements, including the Personal Data Protection Act.
  • Advanced AI Capabilities: Access to Google Cloud’s Vertex AI for developing ML and AI applications.
  • Comprehensive Resources: Includes GKE, NVIDIA Tensor Core GPUs, AlloyDB Omni, and Dataproc in a secure environment.

Gulf Edge Company Limited is a subsidiary of Gulf Energy Development Public Company Limited, a prominent energy and infrastructure company based in Bangkok, Thailand. Gulf Energy Development is known for its extensive investments in power generation and infrastructure projects. 

Singtel and Hitachi Digital collaborate to 5G + AI

Singtel announced a new collaboration with Hitachi Digital, a provider of comprehensive digital transformation services and technologies. This partnership will combine Hitachi’s advanced AI expertise with Singtel’s Paragon platform, an integrated orchestration solution for 5G, edge computing, and cloud services.

In the initial phase, Hitachi Digital will deploy the Paragon platform at Hitachi Americas’ Santa Clara R&D Labs. This will be followed by a pilot project at a U.S. factory to explore Industry 4.0 use cases. The pilot aims to validate the interoperability of Hitachi’s AI applications, focusing on quality assurance, workplace safety, immersive training, and pre-emptive maintenance using the Paragon platform. Additionally, this trial will facilitate the integration of Paragon with Hitachi’s industry cloud applications and digital services, addressing the challenges of complex, low-latency connectivity and enhancing productivity.

Hitachi’s pre-built Industrial AI applications, combined with the Paragon platform’s network and multi-cloud orchestration capabilities, will enable the creation of various Paragon-related offerings. These solutions are designed to help clients improve and accelerate their cloud operations. Moving forward, Hitachi Digital Services will market these offerings as a Singtel Paragon authorized System Integrator, providing a unique value proposition to enterprise customers seeking to leverage multiple network protocols for digital transformation in industrial environments.

Key Points:

  • Strategic Collaboration: Singtel and Hitachi Digital join forces to integrate AI with 5G, edge computing, and cloud.
  • Pilot Project: Initial deployment at Hitachi’s Santa Clara R&D Labs, followed by a U.S. factory trial for Industry 4.0 applications.
  • Interoperability Testing: Focus on validating AI applications for quality assurance, safety, training, and maintenance.
  • Enhanced Offerings: Creation of new solutions to improve cloud operations and digital transformation in industrial settings.

América Móvil consolidates its share in Chile's ClaroVTR

América Móvil and Liberty Latin America confirmed that América Móvil will be consolidating ClaroVTR into its ongoing operations. 

ClaroVTR is a Chilean telecommunications company that operates under a joint venture of the Mexican telecommunications giant América Móvil and Liberty Latin America.

ClaroVTR was formed in 2000 through the merger of Chile's fourth and fifth largest telecommunications companies, VTR (owned by Telefónica) and Claro (owned by América Móvil).

In 2004, América Móvil acquired a majority stake in ClaroVTR, and since then, the company has expanded its services and network coverage across Chile.

In 2016, Liberty Latin America Limited, a publicly traded company listed on the NASDAQ stock exchange, acquired a 20% stake in ClaroVTR from América Móvil for approximately $800 million. As of 2022, ClaroVTR has around 1.3 million subscribers across Chile.

In a press release, América Móvil said it has been providing fundingto ClaroVTR through convertible notes to support the execution of its business plan and for the refinancing of certain bank debt existing at the formation of the JV. Liberty Latin America had the right to catch-up its respective portion of such funding commitments by the middle of this year for ClaroVTR to continue as a 50:50 joint venture.

On June 23, 2024, Liberty Latin America informed América Móvil it would not be exercising such right. As a result, AMX will convert its outstanding notes held in ClaroVTR into equity resulting (subject to adjustments at closing) in a controlling interest of approximately 91%. LLA will continue to own approximately 9% of the equity of ClaroVTR (subject to final adjustments at closing).